Showing posts from February, 2019

February 2019 – Economics Observations

By: Dr. Ken Mayland
ClearView Economics, LLC

I’ll make two observations about the government shutdown.

First, what was the real cause of the shutdown?  The true cause of the shutdown was the fact that Congress failed to complete a budget – by September 30 – before the new fiscal year began.  Some areas of appropriations, like the defense budget, were in place as FY2019 began.  Other areas of the budget, however, encompassing the 800,000 government workers, were not nailed down as the new fiscal year started.  These areas were running on “automatic pilot,” in the form of a continuing resolution.  Time ran out on the authority to spend without a budget deal in place.  Obviously, one side wanted spending for “the wall” and the other side didn’t.  On $4.1 trillion of annual government spending outlays, $5.7 billion of spending on some fashion of a border barrier is inconsequential.

My second observation regarding the government shutdown concerns its economic (i.e., GDP) impact.  Various es…

Congress Turns its Attention to Tariffs as New Reports Show Damage to U.S. Industry Sectors

With the shutdown temporarily ended, Congress turned its attention to other issues including trade. Two bills were introduced in Congress aimed at reining in the President’s power to impose Section 232 (national security) trade restrictions.

The Bicameral Trade Authority Act, introduced by Senator Pat Toomey (R-PA), would give Congress more control over Section 232 investigations. The Coalition of American Metal Manufacturers and Users supports the legislation (PMA is a founding member of the Coalition) as the bill contains provisions that would allow Congress to review and terminate 232 tariffs already in place, namely the steel and aluminum tariffs.

Senator Rob Portman (R-OH) reintroduced the Trade Security Act of 2019, a bill that would move Section 232 national security investigations to the Department of Defense and provide Congress more oversight of Section 232 investigations. However, Senator Portman’s bill would only apply to future Section 232 investigations so the steel and …